Squeezy Is Full: SP500 Levels, Refreshed

POSITION: no position in SPY

At the market’s closing price of 1353 on Thursday July 7th, 2011 (another lower long-term high), the SP500 had been up for 7 out of 8 trading days. Now, after its 85 point short squeeze (+6.7%), it appears that Squeezy The Shark is full.

Hindsight in market prices is always crystal clear. In the chart below you can see that US stocks failed to break-out to either a fresh YTD high (1363) or above our long-term TAIL of resistance (1377). In the immediate and long-term (2 of our 3 core risk management durations – TRADE and TAIL), that’s bearish.

What’s bullish is that the intermediate-term TREND line of support for the SP500 remains intact (1316). Can the TREND line hold? We’ll have to wait and watch – because the best way to manage risk around market ranges is to let the market’s last price tell us what to do next. If 1317 breaks, there is no long-term TAIL of support to 1241.

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